VIX, Puts & Bulls
As the $VIX decreases
put options decrease in cost (click on 1yr)
allowing bulls to
aggressively increase long positions.
Anticipate parabolic behavior
going into NOV
with increased OCT NFP (over SEP).
Watch Retail Sales per Actual Employment to move with AE or decrease.
If RS/AE increase with the climb that should improve earnings.
Low institutional participation
means fickle retail participation
resulting in extreme volatility.
OIL & THE $USD
Increased CO prices act as an artificial FFR increase
which our government may allow, to suppress inflationary pressures.
Additionally, alternative energy becomes competitive at higher CO prices.
Shifting the US mobility fuel dependence on imported oil to electricity is a long term goal.
In order to increase CO the $USD must come down.
Market will increase.
Showing posts with label Prediction. Show all posts
Showing posts with label Prediction. Show all posts
Thursday, October 22, 2009
Sunday, October 18, 2009
Wednesday, July 29, 2009
Thursday, July 23, 2009
Tuesday, June 30, 2009
Econ Events Into AUG + Prediction
As we saw from today's surprise drop JUN Consumer Confidence conensus & my own estimates can certainly be wrong.
I cannot emphasize enough how much my own bias & estimates rely on the seasonal up-swell of Existing Home sales into summer that will drop off into fall & over winter.
A lot of hopium is being placed on increasing home sales & price stabilization as a market bottom rather than my PoV that it is simply an ongoing disaster mitigation event.
Summer draws down = home sales draw down
Home sales draw down + increasing unemployment = more home inventory
More home inventory = drop in prices
Drop in prices = decreased homeowner equity/net worth
Decreased homeowner equity/net worth + increasing unemployment = decreased consumer spending
Decreased consumer spending = smaller EPSs
Smaller EPSs + same PE ratios = dropping market
If both EPSs + shrinking PE ratios = rapidly decaying market as money flows out of equities & commodities and into $USD & treasuries.
The good news is that gas prices should also drop!
"Yes", deflation concerns will be back on the table.
What I don't know is how government spending/overt jobs bills will counter any drop in consumer spending.
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